By Jonathan Dayan – Financial trading tools like market insight tools, trader messaging tools and social trading networks can deliver a lot of added value to the average trader, because they offer new financial market insights quickly and simply. Despite the clear advantages which these tools provide they are often disregarded by traders who find them complicated to use. This is a pity because they can add a lot to the effectiveness of the average trader, particularly those traders who are relatively new to financial market trading. In this article we’ll take a brief look at the ways in which these three trading tools can help traders get more from their financial trading today and every day.
Trader Insight Tools – An Inside Take On The Markets
Trader insight tools offer a snapshot of the sentiment which is forming around market trading. Used in combination with live price feeds or trading charts they enable you to see not only where the market in a particular asset stands at a particular moment in time, but also where other traders expect it to go next. These tools aggregate the trading behavior of dozens or hundreds of other traders to give you a live record of the percentage of sampled traders who are buying and the percentage who are selling a particular asset. As a result they offer a microcosm of the wider financial market (the more traders are sampled the more accurate they are likely to be). Such tools are an excellent foundation for placing trades in the market, in particular for new traders who may not be clear on the best way to trade a particular asset. It is a general view that the majority of people sampled on a particular issue are more likely to be correct than the minority and that the greater the difference between the size of the majority and of the minority opinions, the more likely this trend is to hold. On this basis, many traders feel comfortable entering trading positions simply by taking a quick look at a trader insight tool to look for assets where there is a clear imbalance between buyers and sellers which they can use as a signal to enter the market in the direction of the majority opinion.
Trader Messaging Tools – Talk With other Traders
Trader messaging tools based on the instant messenger system are available through numerous trading platforms these days. These tools allow individual financial traders to communicate directly with each other, regardless of where in the world they reside and whether or not they have ever contacted each other before. This tool is a very effective way for traders to learn new information about the market from their trading peers as well as sharing hints and tips which they may have picked up themselves. Because these tools allow global communication between traders they are an effective way of disseminating new market information which can arise in one region to the wider trading world – where better to get new tips on trading USD/CAD than Canada, or Gold tips than Australia? As a result, communication with other traders offers the potential to gather new information before the rest of the market and thereby to get ahead of the latest trend. In theory, therefore, trader messaging tools are one of the most valuable tools on offer by trading platforms. In practice however this may not be the case. This is because communication is by nature a two way activity and whereas we may wish to communicate with other traders to learn what they know it does not mean that they want to communicate with us. Another issue that is faced by this tool is the question of sincerity. Put simply, how can we know that the trader we are communicating with is giving us sincere and honest information or advice? Regardless of these possible limitations trader messaging systems are a valuable and popular addition to the financial trader’s toolkit.
Social Trading Networks – The Ultimate Trading Tool
Social trading networks like eToro’s OpenBook combine the best features of trader insight and trader messaging tools and offer a whole range of additional features besides. As a result they are increasingly viewed by financial trading pundits as the trading tools of the future. Social trading networks borrow the best insights from social networks like Facebook and combine them with the specific needs of the financial trader in order to produce a tool which enables every trader to see into the inner workings of the financial market as never before. By using a social trading network the trader can see the trading profiles of every other registered trader and through it learn every feature of how that trader trades the market: their success rate; the assets they like trade; when they’re active in the market etc. On the aggregated level the mass of information collected by a social trading network enables traders to see live rankings of the most successful traders: on the day, in the week or in the month. Using this information it is possible to start following the activity of specific traders, to add them as friends, start communicating with them and even to start copying the trades they make: live and in real time. As a result, social trading networks offer an ideal learning environment for financial traders which can help traders at every level of experience gain new insights into trading and spot new trading opportunities by observing and interacting with other traders.
In conclusion, each of these three trading tools offer a variety of enriching ways for you to upgrade your financial trading. By employing these trading tools in your trading strategy you should find yourself better able to harness the mass of information about the financial markets which is available and more in control of the trading decisions you make as a result. Financial trading should be as rewarding and enjoyable an activity as possible and by employing these trading tools in your daily financial trading activity you should find your trading experience improves as a consequence.
Forex Market Article provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.